Oil prices jumped Tuesday for the second straight day and gas prices moved higher in the United States, underscoring the threat of rising inflation posed by the Iran war. Coming after nearly five years of elevated costs, even a modest pickup in prices could further sour many Americans on the economy and heighten the affordability concerns that have become a top political issue. A key issue, economists say, is how long the conflict lasts and whether key shipping routes, such a the Strait of Hormuz, at the mouth of the Persian Gulf, are closed. About one-fifth of the world's oil and natural gas is shipped through the Strait.
Shares of major U.S. companies in the energy sector are sharply higher after President Donald Trump announced plans to take control of Venezuela's oil industry and said American companies would revitalize it after capturing President Nicolás Maduro. While the U.S. action is unlikely to have an immediate impact on crude prices given the current glut in the market, it could upend energy markets. Venezuela's oil industry is in disrepair after years of neglect and international sanctions. Some oil industry analysts believe that Venezuela could double or triple its current output of about 1.1 million barrels of oil a day and return the nation to historic production levels relatively quickly, others see a much longer road ahead.
President Donald Trump is calling for the U.S. and other oil-producing economies to pump more oil as crude prices remain volatile following U.S. strikes on Iranian nuclear facilities. The White House is also sharpening its warning to Iran against closing the Strait of Hormuz, a vital oil and gas shipping lane, in retaliation for the U.S. carrying out strikes on Iran's nuclear program. Trump in a social media posting wrote, "To the Department of Energy: DRILL, BABY, DRILL!!!" He made his call hours before Iran launched attacks on U.S. forces at Qatar's Al Udeid Air Base, its first act of direct retaliation against the U.S. after the American strikes. A U.S. defense official says no injuries were reported in the attack.
Gas prices are once again on the decline across the U.S. That's bringing some relief to drivers now paying a little less to fill up their tanks. The AAA motor club says the national average for gas prices on Monday stood around $3.44 a gallon. That's down about 8 cents from a week ago, more than 19 cents from one month back, and over 14 cents down from this time last year. Why the recent fall in prices at the pump? Industry analysts point to a blend of mild demand and increasing supply — as well as relatively mild oil prices worldwide. The future is never promised. But, if there are no major unexpected production interruptions, some experts say that prices could keep working their way lower.
